Builder’s Risk insurance is a type of construction insurance designed to protect buildings and structures that are under construction or renovation. In part 1 of this series, we discussed what the policy covers, what it excludes, and various aspects of the policy cost. In part 2 let’s look at:
Builder’s Risk insurance, also known as Course of Construction, typically lasts either 3, 6, or 12 months. Coverage generally takes effect on the date of signing all contracts, unless policy provisions state otherwise. And it usually ends on completion of the building. Other circumstances upon which coverage will end, include:
Yes. If the initial policy term ends before the completion of the project, you can extend it, but usually only once. You can also add more coverage to your policy. All you need to do is call us at BuildersRisk.net to discuss these extensions.
Builder’s Risk insurance is a one-shot construction insurance policy, meaning you will not get any of your paid premiums back if you cancel early.
Construction insurance is temporary, so get permanent property insurance after completion of the project. For a residential project, you will need a Homeowners Insurance policy. But you must first occupy the home to qualify for coverage. It’s best to make arrangements for the coverage before your Builder’s Risk insurance expires to avoid going without insurance for an extended period of time.
Unlike other types of construction insurance such as General Liability or Workers Compensation, Builder’s Risk insurance is not mandatory. What this means is, the law does not require contractors and property owners to have a Builder’s Risk policy during construction.
However, coverage is often a requirement in contracts such as loan agreements and independent contractor agreements. If there is financing of your project, the lender usually requires that you, as the contractor or developer, carry Builder’s Risk insurance. It’s also often required to win contracts from local or state governments and large organizations.
It is advised that you purchase the policy before the project begins. This is to protect the labor and material costs incurred after the project’s start date. Otherwise, you will not have coverage on any work that takes place.
At BuildersRisk.net we have over 20 years of experience providing financial security and reliability to our clients. We aim to provide comprehensive coverage. Our team also provides customized customer service to meet each client’s needs. We achieve this by working with 15 top-notch insurance carriers across all 50 states in America that can deliver policies in less than 1-hour. Don’t settle for the average, give us a call today at (855) 480-2252 for construction insurance customized to suit your business needs at affordable rates.